Why Medical Property Stocks Are Up Nearly 14% Today

Although Friday was a sleepy news day for Medical Property Trust (MPW 13.75%)the latest analyst move on the stock has motivated investors to jump into it. As a result, shares of the real estate investment trust (REIT) rose during the trading session. They ended the day nearly 14% higher in price, outpacing the 0.5% gain a S&P 500 index.

A good deal inspires positive reactions

Two professional Medical Property Trust observers weighed in on the stock on Friday. Of the two, the most important came from Colliers Security, David Toti. He upgraded his recommendation on the REIT to buy from the previous neutral, placing a price target of $6.50 per share on the stock.

Toti’s colleague Michael Lewis of Truist Securities has also become much more bullish on the future of Medical Properties Trust. He raised his price target 20% higher to $6 per share from $5.

The timing is not accidental. Both moves came just days after news from Medical Properties Trust that it had reached a settlement with its most troubled tenant, Steward Health Care (which filed for Chapter 11 bankruptcy in May). Under the terms of the agreement, the REIT will regain control of the 23 Steward leased properties; it has already lined up new tenants for 15 of them.

A necessary exit

The Steward arrangement is a milestone for Medical Properties Trust, helping to remove a millstone. The failed tenant situation was largely the reason for the REIT’s pronounced decline in popularity, and the satisfactory resolution was — and likely will continue to be — an incentive for investors to reevaluate their own views of the company. .